Is the government secretly planning to put taxpayers on the hook to build the world’s biggest new thermal coal mine? It is refusing to rule it out.

Until now, speculation has centred on a A$1 billion discount loan from the Northern Australia Infrastructure Facility (NAIF) to Indian billionaire Gautam Adani to build a rail line from the Galilee Basin to Abbot Point on the Queensland coast. This is a “cart before the horse” proposition, however. There can be no rail line without a mining project, and Adani is yet to attract project finance from commercial banks to build its mine.

A new report by the Australian Conservation Foundation notes that a number of approaches were made to the federal government and its credit agency, Export Finance and Insurance Corporation (EFIC), asking whether the agency was considering supporting the Carmichael thermal coal project. EFIC already has a team working with NAIF on project evaluation.

Detailed questions were put to the minister for trade, tourism and investment, Stephen Ciobo, whose portfolio oversees EFIC, and the Department of Foreign Affairs and Trade (DFAT). There was no response.

EFIC and NAIF were also contacted by the author, who conducted an investigation for the ACF into the NAIF board. NAIF did not respond at all. EFIC directed questions to NAIF and DFAT, both of which declined to respond.

It is within EFIC’s legal framework to finance export projects – either by guaranteeing or insuring their loans. Adani Mining, the local offshoot of an Indian conglomerate, is eligible under the EFIC legislation for government assistance.

EFIC acts at the instruction of the minister, in this case the Queenslander Stephen Ciobo. Adani Mining is registered in Australia. It is an exporter and EFIC has a track record of financing large fossil fuel projects.

The ACF report, Dirty Deeds, Done for Cheap Dirt, notes that EFIC – despite its mandate to support small and medium-sized exporters – has a track record in making sizeable investments in large fossil fuel projects:

It is currently considering a deal to finance the 12 million tonnes per annum Boikarabelo coal mine and railway in South Africa, ironically a project closer by ship to India than Adani’s Carmichael and one that will directly compete with Australian exports in a declining Indian market for seaborne coal imports.

In 2014, more than three-quarters of the $576.7 million worth of transactions signed by EFIC went to just three parties: a Chilean company that runs the biggest copper mine in the world, a construction giant listed on the Johannesburg Stock Exchange, and a billion-dollar Belgian smelting group.

Due to public pressure from environment groups and the poor financial prospects for the project, Adani has had trouble attracting interest from commercial banks internationally. The world market for seaborne thermal coal exports is in decline and India is on target to phase out imports by 2021, so the project does not appear to make commercial sense. Futures prices for Newcastle thermal coal, generally of superior quality to Carmichael coal, languish at $US68 per metric tonne, a level at which the mine is unprofitable.

But if the federal government were to provide loan insurance or loan guarantees to a commercial banking syndicate, the banks might be more inclined to fund Adani. Australian taxpayers, however, would then be at risk for the estimated $10 billion in project finance. That’s on top of the concessional loan from NAIF, which is yet to be approved, of $1 billion for the rail line.

ACF chief executive Kelly O’Shanassy said yesterday that it was an outrageous idea that “public money could be put on the line to protect private profit from the Adani coal mine that will help destroy the [Great Barrier] Reef and Australian tourism jobs”.

The report also found the NAIF board is stacked with resource industry directors, past and present. Despite its mandate to invest in a wide range of infrastructure, including communications, transport, airports, education and renewable energy, the board’s expertise is heavily skewed towards mining and coal.

The NAIF investment mandate is also vague and its operations are shrouded in secrecy compared with other government financiers such as EFIC and the Clean Energy Finance Corporation (CEFC). Yet is has $5 billion of taxpayers’ money at its disposal.

The minister in charge of NAIF is Matt Canavan who, as minister for resources and northern Australia, is a vocal advocate for coal-fired power plants. He has announced that coal projects are also eligible for NAIF funding.

Even with the enthusiastic support of both the Australian and Queensland governments, the Carmichael project is highly unpopular. Nonetheless, the Queensland government has granted the project an unlimited water licence.

Adani has also been negotiating with the Queensland government for a royalties break. The company announced this week that it would be postponing its final investment decision on Carmichael until the state provided “clarity” on lower or deferred royalties.

Event Details

This paper studies the user experience of the experts who are invited to participate in the EIP surveys. The EIP questionnaire already includes a question about the difficulty of the questions . Although the distribution of the collected responses is encouraging, we have to deal with two problems: i) this distribution is based on the users who have completed the questionnaire (i.e. we do not know the responses of the experts who have dropped out of the survey before answering to this question) and ii) when experts answer that they have faced difficulties, we do not know which questions were difficult for them. To build a deeper understanding about the EIP questionnaire, this paper uses web survey paradata: User agent is used to identify experts responding to the survey using a smartphone. Item response times and drop-out points are used to identify the most difficult questions. The paper concludes with an overall evaluation of the EIP questionnaire and suggestions to improve the user experience for the EIP survey respondents.

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Join us for the launch of the latest Lowy Institute Paper published by Penguin Random House, Remaking the Middle East: How a Troubled Region May Save Itself, by Anthony Bubalo.
The Middle

Event Details

Join us for the launch of the latest Lowy Institute Paper published by Penguin Random House, Remaking the Middle East: How a Troubled Region May Save Itself, by Anthony Bubalo.

The Middle East is experiencing a period of concentrated turmoil unlike anything since the end of the Second World War. Uprisings, coups, and wars have seen governments overthrown, hundreds of thousands killed, and millions displaced.

Anthony Bubalo argues that the current tumult is the result of the irrevocable decay of the nizam – the system under which most states in the region are ruled. But amid the ferment there are also “green shoots” of change which could remake the Middle East in ways that are more inclusive, more democratic, less corrupt, and less violent.

Anthony Bubalo has worked on the Middle East for more than 25 years as a diplomat, intelligence analyst, and researcher. He has lived in Egypt, Saudi Arabia, and Israel. He led the Lowy Institute’s Middle East research for 14 years, and regularly comments on the region’s politics in the Australian and international media.

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Abstract
Exile is most often associated with situations of banishment and diasporic communities. The concept has also been deployed metaphorically to signal large-scale social processes of ontological disembedding and associated paradoxical

Event Details

Abstract

Exile is most often associated with situations of banishment and diasporic communities. The concept has also been deployed metaphorically to signal large-scale social processes of ontological disembedding and associated paradoxical workings at the level of subjectivity. Under contemporary conditions experiences of exile acquire new ambiguities and intensities. Physical separation often cleaves apart from other possible modes of interaction. Related destabilisations in place-based relationships give rise to intensified memory work and newly reflexive subjectivities. Close attention to one Central Australian Aboriginal woman’s situation provides an intimate perspective from which to observe the conjunction of social forces at work in contemporary processes of displacement. Single-person focused ethnography conveys the gruelling experience of navigating exile and the imagined possible selves and lives this condition generates, offers and ultimately withholds.

About the speaker

Melinda Hinkson is an associate professor of anthropology and Australian Research Council Future Fellow at the Alfred Deakin Institute for Citizenship and Globalisation, Deakin University. Much of her work is pursued at the interface between anthropology and visual cultural studies. She has published widely on Warlpiri media production and mediated relations, on the work of Australian anthropologist WEH Stanner, and on the contested cultural politics of the Northern Territory Intervention. Melinda’s 2014 book Remembering the Future: Warlpiri Life through the Prism of Drawing was accompanied by an exhibition she curated for the National Museum of Australia. Her current work focuses on the governance of Indigenous difference and on transformations in Warlpiri relations to place.